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Welsh Ministers 'tested' as dairy crisis deepens

News08 Sep 2014

The Welsh Government is being pressed to take positive action in response to the deepening difficulties in the milk sector by strengthening the dairy code and considering the setting up of a new Wales-based marketing body.

Speaking after a series of meetings in Brussels with EU officials and farming union representatives, as well as dairy farmers and milk processors in Wales, Plaid Cymru’s Shadow Agriculture Minister, Llyr Gruffydd, said the dairy crisis could be the first real test of the new team of Ministers responsible for agriculture in Wales.

“It is clear that the dairy sector faces a protracted period of price volatility. Global prices are dropping with the Russian trade embargo making things considerably worse.

“The end of milk quotas next year, along with the push for increased milk production in Ireland, will also have a bearing on prices here.

“The Welsh Government must bring forward a strong package of support for the industry — including considering establishing a dairy equivalent to Hybu Cig Cymru, the Wales-based red meat promotion body, to more effectively promote and market Welsh milk.

“Funding through the Wales Rural Development Programme and other sources must be used to develop supply chains that can minimise the volatility faced by the sector.

“We also need to re-double efforts to encourage local processing of more added value produce.

“Encouraging procurement policies that better support the Welsh dairy sector should also be a key priority of government and other public bodies,” added Mr Gruffydd.

“New EU procurement rules will have a greater emphasis on environmental considerations, so sourcing local milk and dairy produce could therefore benefit everyone.

“Supermarkets must also play their part and not use the price drop to increase their margins. During the horsemeat scandal they made promises to support the farming industry and this is an opportunity to show they are true to their word.”

Voluntary code

According to Mr Gruffydd there was also room to strengthen the voluntary dairy code to better protect farmers.

“While I understand the need to strike a balance between protecting suppliers and allowing processors to be sufficiently responsive to the markets, the fact that 12 EU countries now provide for compulsory contracts suggests it should be considered again,” he said.

Plaid has also welcomed the EU’s private storage aid measures and supports calls from the farming unions that storage should not be limited to seven months.

It also wants the stored produce gradually re-introduced to the market to lessen any potential adverse impact and any EU budgets originally earmarked for promotion of produce in Russia to now be invested in developing new markets elsewhere.